NEW YORK–Goldman Sachs has released more details around its new foray into online consumer lending.
As CUToday.info reported here, the long-time, exclusive Wall Street bank is moving into online retail lending in competition with many of the fintechs that have entered the space. Unlike those fintechs, such as Prosper, Goldman plans to fund its loans using its own deposits rather than investors’ cash.
Stephen Scherr, head of the company’s banking operations, told attendees at a conference here that “We view this as a balance-sheet activity that will avail us of a certain flexibility in the design of the product.”
In April of this year Goldman Sachs completed its purchase of General Electric Co.’s online bank, adding $16 billion of deposits, and it has since launched a website where customers can open an account with as little as $1.
The investment bank’s new lending solution has been named “Marcus by Goldman Sachs” after the company’s founder.
Scherr said Marcus will make unsecured loans online to consumers with strong credit histories for purposes such as debt consolidation, a space in which companies such as LendingClub have made inroads.